RE agent and inspector responsibilites/liabilities to buyer

RE agent and inspector responsibilites/liabilities to buyer

Florissant, CO · Member since 2013 · 184 posts · 69 votes

This is a long post - thanks for your time!  fyi: house purchased in CO

I recently purchased a HUD house through an agent. I bought the house w/o ever actually seeing it. Never had a 'buyer's agent' agreement - not sure that it should matter. I had an inspection done by someone the RE agent recommended (yes, I knew better but . . .). Doesn't the agent have a fiduciary responsibility to their client (buyer in this case) regardless of any documentation or signed agreement? What is the inspector's liability/responsibility? No - this is not my first 'rodeo' but this case is a bit outrageous: Here are the details:

1) House listed as "gas" (= natural gas; not propane; houses w/ propane are listed as such). My agent and the inspector failed to notice that there was no gas meter on the house.  After closing I called CO nat. gas only to learn that the house has never had natural gas; was on propane.  Would cost about $1000 to run gas from street to the house.  I'm feeling like my agent, the listing agent and my inspector should split the cost to put in the line.  I thought I bought a house w/ natural gas; not propane.   Thoughts?  

2) My inspector failed to document that the entire water supply line had been disassembled in the crawl space.  I knew the house was "winterized" but did not discover the disassembled supply lines until I was moving in.  Called the water company to turn on the water . . and . . .no water.  My agent also knew the house was 'winterized" but never said anything about what that entailed.  I 'thought' it just meant the water was turned off, faucets open to drain lines and antifreeze in discharge lines.  Now I'm here w/ no water for days!  Do I have any recourse w/ the agent and/or inspector? Had I known the lines were disassembled, I could have called a plumber in advance.  

3) Inspector failed to document a lot of 'minor' damage to the property including flooring that was 'unglued' due to water damage (I knew there was a plumbing leak, but inspector indicated it was in the kitchen; actually the leak was in the bathroom).  Other damage includes major holes in the walls for plumbing access (shower), water damage around the doors, not so small areas of patched walls done very poorly (possible water damage 'repair'), holes in doors, window screens missing, possible water leaks from roof (?) in a couple areas around the house w/ possible mold (my opinion; the whole house smells musky like mildew/mold).  I will likely find other things.  

I am inclined to hire another 'inspector' to document all the problems, particularly to address the possible roof leaks and mold (now dried in the cold, dry CO winters).  I wanted to start tearing out carpet etc, but think I should wait till I document all this. 

What recourse might I pursue w/ my agent and inspector?  I really feel like I paid more for this house than I should have, had the true condition been disclosed/documented etc.  Also, I had asked my agent to take additional photos while I still had a chance to back out; she only sent me photos of the outside - I figured there was nothing 'undisclosed' in the interior.  

btw: I know that HUD houses are sold 'as is' - which is why I hired an inspector before closing, while I could still back out - which I very well may have done had I known about all the issues.

thanks for your time

Kelly 

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  • Greg H.Pro Member
    Moderator
    Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes
    9y

    @Kelly G.

    The water issue should have been contained in the PCR addendum provided at Hudhomestore.com and HUD would not allow the water to be turned on for an inspection. Did your agent explain that to you?

    Did you hire a licensed inspector ?  His forms probably have many disclaimers like they are not responsible if the utilities are not on.  A pressure test could have been done on the water line to isolate any leaks at an additional cost

    Running a gas line could create additional costs for you over and above the $1000.  Appliances run on propane or natural gas but not both(Some can but it is rare) Conversion kits may be available for heaters and stoves but more than likely the hot water heater would have to be replaced

    As to whether you have an action against the agent and the inspector...it might be worth a call to a lawyer.  At the very least, I would ask for my inspection fees to be returned

  • Florissant, CO · Member since 2013 · 184 posts · 69 votes
    9y

    Hi @Greg H. - thought you might chime in - appreciate your input.  

    Actually, the PCR only identified that there was a leak, it did not address where.  And I had to find the PCR - my agent was clueless, but I didn't realize that until well into the process.  And - the issue is not about getting the water turned on for inspection.  I knew that wasn't possible, and given the disclosure in the listing and PCR - I knew there was a leak. 

    The problem is that none of the "professionals" I hired bothered to inform me during escrow (not a CO term I know, but I lived in CA), AND my inspector completely missed the fact that the plumbing system, including the meter, was completely disconnected under the house; apparently for 'winterization'.  A "leak" somewhere in the plumbing is different, at least to me, than the fact that the water distribution system, beginning at the meter was completely disconnected.  The inspector crawled under the house (manu home) and discovered that the heating ducts were disconnected, but apparently missed the fact that the water lines were also disconnected.  Among the other issues I addressed.    

    I figured, when I got to the house, that I would have the water company turn the water on to the house (done) and that I could systematically close all the other lines to find the 'leak'; but at least I had hoped to have some water somewhere in the house.  With the system disconnected at the meter - I got 'nothin! and of course it was Friday afternoon and I'm screwed at least until Monday - assuming the plumber can get there on Monday.  (at least I have my RV to live in for now).

    This just strikes me as so Completely Unprofessional, and I am P O'd!!  What am I paying them for if they can't do their job?  If I am not present for an inspection etc, I expect my agent to be my eyes and ears etc.  In addition, this extra 'plumbing' bill will likely be substantial, as I cannot connect a meter (legally here in CO). When I get an inspection report I expect to have a pretty good idea of the the repairs costs are going to be - so I can decide to continue w/ the purchase or back out.  I did not get even a fraction of the repairs and issues associated with this property.  

    I think I need a lawyer . . . I can probably get my inspection fee and agent commission returned, but I think they owe me more!

    thanks for your time

    Kelly

  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    9y

    Really sucks, but buying site unseen, and buying HUD properties are both high risk activities. MLS information on REO properties typically has many bits of incorrect information.

  • Florissant, CO · Member since 2013 · 184 posts · 69 votes
    9y

    Hi Russell - I appreciate your comments . . .

    Yeah, I Know that buying 'site unseen' and HUD are risky . . and I was willing to take "some" of those risks . . but . . isn't that why I'm hiring 2 "professionals" to have my back? I'm an independent consultant, and if I neglected to inform my clients about significant issues - well - I wouldn't have any clients and they'd probably sue me for 'negligence'. This looks like Negligence and Incompetence to me.

    Kelly

  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    9y
    Originally posted by @Kelly G.:

    Hi Russell - I appreciate your comments . . .

    Yeah, I Know that buying 'site unseen' and HUD are risky . . and I was willing to take "some" of those risks . . but . . isn't that why I'm hiring 2 "professionals" to have my back? I'm an independent consultant, and if I neglected to inform my clients about significant issues - well - I wouldn't have any clients and they'd probably sue me for 'negligence'. This looks like Negligence and Incompetence to me.

    Kelly

     Doesnt really look like either to me due to the risky activities involved. A lawsuit here would likely go nowhere. Home inspection standard contracts limit their liability to the cost of their inspection. So at best you are likely to get a refund of your inspection cost.

  • Specialist · Kirkland, WA · Member since 2013 · 1k+ posts · 817 votes
    9y

    Manu?  Is the insulation and cover in place?

    Notice the black cover... Inspections are almost never invasive and the plumbing is mostly concealed by this black mesh cover over the insulation in MANU's.



    Here you can see the PB piping, but not if it is connected to anything


    Here's the connection to the city supply.

    The big question is if the inspector has experience with Manu's.  They tend to be a very different beast, and if they'd known to look for the manufacturing tags, (and they are available) they would have been informed of the gas/propane.

  • Florissant, CO · Member since 2013 · 184 posts · 69 votes
    9y

    Hey @Troy Fisher - thanks for the comments and photos.

    Yes, the black plastic and insulation are all in place and snug.  See below:  the blue thing is the water filter (yeah - bad place for it) and the black thing on the ground to the right is the water meter (per water district maintenance guy that was at the house to turn the water on from the street).  According to the District Water guy - tampering with, removing etc that meter w/o written permission is a big No-No and he has no record of this.  

    the pipe from the filter to the left (not in photo) is also disconnected.  again - this is only 10 ft or so behind the heating ducts that were disconnected so my inspector should have seen this! don't ya think?

    Oh - when we briefly turned the water on to the house and heard nothing - we left a large puddle of water on the ground here.  Also - due to the leak in the house when the house was vacant the Water District turned the water to the house off ; Before all this was disconnected.  

    thanks for your time

    Kelly

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